Under Part I of the Arbitration and Conciliation Act, 1996, Section 31 sets out the rules for how arbitral awards should be presented.
An Award should be written and signed by the arbitrators who made the decision. If there are several arbitrators, the award is valid if majority of the arbitrators affix their signatures on the said award and if any of the arbitrators doesn’t sign then he has to give the reason for the same.
Section 30 of the Arbitration Act, states that Arbitral Tribunal may encourage settling of disputes through methods like mediation or conciliation and come to an agreement. If the parties in arbitration come to an agreement, the Tribunal will end the proceedings and will pass an award in accordance with the agreed terms and such award shall have the same legal standing as any other arbitral award.
Enforcement of Arbitral Award
Arbitral awards rendered in India
- Section 36 of the Arbitration Act explains how arbitral awards from arbitrations held in India can be enforced. The procedure is as follows-
- After receiving an award, the award-holder must wait three months before they can seek enforcement. During these three months, the award can be challenged under Section 34 of the Arbitration Act.
- After this period, if a court deems necessary, the award is enforceable and then it cannot be challenged further during the enforcement process.
- The award will then be enforced just like a court decree in accordance with the rules delineated in Code of Civil Procedure, 1908 (CPC).
- A petition to enforce the award can be filed in any court which are having the jurisdiction to execute a decree, without having the need to transfer the decree from the court that had jurisdiction over the arbitration.
For domestic awards the enforcement petition must be filed with the appropriate commercial court. This could be the Principal Civil Court of Original Jurisdiction in a district or, if applicable, the commercial division of the relevant High Court that has ordinary original civil jurisdiction. The awards can be enforced like a decree of a court and the Court upon application may issue warrants of attachment and arrest in order to satisfy the award.
Arbitral Awards rendered by foreign arbitral tribunals
India is a signatory to both the New York Convention and the Geneva Convention on recognizing and enforcing foreign arbitral awards. If a party receives a binding award from a country that is also a signatory to either Convention, and the award comes from a territory recognized by India as a convention country, it can be enforced in India.
Enforcing a foreign award in India involves two steps-
- Filing of execution petition in the Hon’ble High Court, thereafter the Court checks if the award meets the criteria set by the Arbitration Act.
- If the Court is satisfied that the award is enforceable, then the award will be efficiently executed.
Requirements for enforcing the foreign arbitral awards
To validate foreign awards in India, you must present:
- the original award or an authenticated copy as per the laws of the country where it was issued;
- the original agreement or a certified copy; and
- any additional evidence needed to support the foreign award.
Limitation Period For Enforcement of Arbitral Awards
The limitation period for enforcing domestic awards is 12 years which is equivalent to the limitation period for executing any other decree, as per the Limitation Act, 1963, but the limitation period for enforcing of a foreign award is 3 years from the date of passing of an award.
Conclusion
As the saying goes, winning a favourable decision is only half the battle won and often marks the beginning of the journey toward justice but the ongoing judicial delays in enforcement proceedings highlight that realizing one’s rights can be challenging and slow. To navigate these complexities and ensure a smoother enforcement process, applicants must proactively address any potential issues that might arise during enforcement. Thus, by addressing potential issues in advance and taking a proactive approach to enforcement, parties can expedite the realization of the award’s benefits.
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FAQs
1. What is the procedure for enforcing a domestic arbitration award in India?
Enforcement of arbitration awards in India for domestic awards follows the provisions laid out in the Arbitration and Conciliation Act, 1996. Once an arbitration award is issued, the party seeking enforcement must apply to the relevant court within the jurisdiction where the assets of the losing party are located. The court will examine the award for compliance with procedural requirements and may enforce it as a decree of the court upon satisfaction.
2. How can a foreign arbitration award be enforced in India?
For foreign arbitration awards, the enforcement process is governed by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards or the Geneva Convention. India, being a signatory to the New York Convention, allows for the enforcement of foreign awards subject to certain conditions. The party seeking enforcement must submit an application to the competent court along with the original award and its duly authenticated translation, demonstrating that the award meets the criteria of being final and binding in the jurisdiction where it was made.
3. What are the common challenges faced in the enforcement of arbitration awards in India?
Common challenges in the enforcement of arbitration awards in India include delays in court procedures, challenges to the validity of the arbitration agreement or award and procedural objections raised by the party against whom enforcement is sought. These challenges can lead to prolonged litigation and uncertainty in the enforcement process.
4. What is the time limit for enforcing an arbitration award in India?
The time limit for enforcement of arbitration awards in India is typically 12 years from the date of the award, as prescribed under the Limitation Act, 1963. However, timely enforcement is advisable to avoid procedural complications and potential objections from the opposing party.
5. Can a party appeal against the enforcement of an arbitration award in India?
In India, a party can appeal against the enforcement of an arbitration award under limited grounds provided by the Arbitration and Conciliation Act, 1996. These grounds include issues such as procedural unfairness, lack of jurisdiction, or public policy concerns. However, the scope of such appeals is narrow, focusing primarily on procedural irregularities rather than re-examining the merits of the arbitration award itself.
Author: Tarun Biswas, Partner
Co- Author: Namanveer Sodhi, Associate
